Trading Statement

RNS Number : 0198W
Asia Distribution Solutions Limited
05 June 2008

Asia Distribution Solutions Limited
Trading Update
ADSL ("ADSL" or "the Company") is pleased to announce that the profit after tax in the first quarter of 2008 totalled �70,000 (2007:
�206,000 pro forma net of tax profit for the twelve months). The result was just marginally behind the budget despite China experiencing the
worst snow fall in the past 50 years in February of this year, bringing much of Shanghai to a standstill for a period of time.

Moreover, as a result of responsive measures taken by the Company to ensure a stable and continuous supply and delivery of ADSL*s
products in the Chengdu region, it is expected that the recent tragic earthquake in Sichuen would only impact modestly on the Company*s full
year result in 2008.

Whilst the acquisitions of Run Ke and Chengdu are nearing completion, ADSL has already benefited from the ability to market its products
to customers from Run Ke and Chengdu. ADSL now services over 2,000 on-trade and retail outlets in China. The Run Ke operation has also
recently secured a further 40 outlets.

Negotiations to supply the Company*s private label beverages to other retail chains (including additional Carrefour retail fascias, to
complement ongoing arrangements with Carrefour*s DIA fascia,) are progressing well and further announcements will be made as appropriate.

Current trading in the Shanghai operation is strong and in line with the Board*s expectations. The Company has continued to make good
progress with its strategies to broaden the scale of operations and to accelerate the growth of its business.
Formation of Executive Committee

ADSL has formed an executive committee board (Exco) consisting of Steve Wong CEO and Alan Leung FD. We are pleased to announce the
appointment of Andrew Tan, Robert Ng and Mr Qi Zhi. to the Exco as Board members. Steve and Alan*s contribution has already had a positive
impact on the Group*s performance and we anticipate that the new appointments will give a stronger platform in driving the business forward.

Acquisitions Update

We are still awaiting the completion formalities and satisfaction of certain conditions for the Run Ke acquisition, of which the
consideration amounts to Rmb7 million, comprising Rmb1.75 million in cash and Rmb5.25 million in shares. The cash payment portion will be
completed this month and the share portion will be completed in three years, subject to profit targets in the acquisition agreement. Whilst
the completion is in progress, we continue to service all of Run Ke*s accounts through a subcontracting agreement with the vendor.

The completion of the Chengdu acquisition is also in process. While we are awaiting several regulatory approvals, we continue to service
all of Chengdu*s accounts through a subcontracting agreement with the vendor.

ADSL has also entered into an agreement to acquire several wine stocks from Shi Xuan Trading (Shanghai ) Co Ltd (Shi Xuan) amounting to
Rmb2 million (�146,284). The payment will be satisfied by issuing 539,000 ADSL shares to Shi Xuan (based on a price per share of about 27p).
Application for the admission of the shares will be made on or around 16th June. Under the purchase agreement, Shi Xuan will also
immediately manage and provide us with approximately 300 HORECA and trade account outlets through which they will promote and sell ADSL
products across China.
Shanghai Wine Mall

Following the successful opening of the Wine Mall and the recent acquisition of the Gao Li Yuan business in Chengdu, ADSL*s reputation
has improved dramatically. Our plan to become the local distributor of choice is on course. We intend to replicate this model in further
major population centres in China as the opportunities arise.
Operating Review

Since ADSL*s inception we have conducted a thorough ongoing review of the business and how best our cash resource may be employed in the
logistical, supply and management platform that we are building throughout China for the distribution of the Company's various products.

We have concluded that the Company*s assets would be better employed in developing the supply chain management resource as opposed to
investing in our Joint Venture (JV) with our bottling plant Vitality Tianjin, which commenced production of our own ADSL brand (Kelsoloch)
mixers that are being distributed by ADSL to existing hotel, restaurant and cafcustomers that already purchase branded alcohol lines from
ADSL.

In April 2008, ADSL entered into a revised agreement with the JV Partner for both parties to reduce the total capital investments in the
JV from USD5 million to USD1.35 million. Under the revised agreement, ADSL will contribute a total capital of USD810,000 and hold 60% of the
JV. ADSL has already contributed USD600,000 of cash in the JV. Subject to the approval by the local authority, ADSL will only be obliged to
further invest the remaining balance of USD210,000 in the JV as stipulated in the revised JV agreement.

At the same time, the Company has entered into a co-packer agreement with Vitality which ensures that all our own label and third party
labelling can be manufactured without any further investment requirement from ADSL. Furthermore, as sales continue, ADSL shall seek to
develop various co-packer agreements throughout China in order to reduce distribution and transport cost, thereby maintaining efficiencies
and supply chain management.

Chairman, Michael Kingshott commented:

"Our commitment to growing the business continues. It is pleasing to see the progress that we have made and I would like to welcome the
new additions to the Exco Board. I believe their input will be invaluable over the coming months. The Group*s prospects remain strong and I
look forward to updating shareholders at the half year results."

Chief Executive, Steve Wong commented:

"The mixture of organic growth and growth by acquisition has proved extremely advantageous. As we reach a critical mass, we will be able
to service a far greater proportion of accounts on a national scale."

"Our performance to date highlights the fact that our brands are well supported and that our routes to market are strong. The
opportunities that exist for ADSL are vast and our future remains promising."

-ends-

For further information please contact:

Asia Distribution Solutions Limited
Michael Kingshott, Executive Chairman + 44 20 7583 8833
Steve Wong, Managing Director + 852 9025 0988
Alan Leung, Chief Financial Officer + 86 13911651763

Evolution Securities China Limited
(Financial adviser and broker)
Barry Saint +44 20 7220 4850
Armen Ho +852 2167 0107 / +44 20 7220 4875

Evolution Securities Limited
(Nominated adviser)
Jeremy Ellis +4420 7071 4300

City Profile
Jonathan Gillen +44 20 7448 3244
William Attwell

This information is provided by RNS
The company news service from the London Stock Exchange

END

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